The Macroeconomic Effects of AI

Imad A. Moosa ()

Chapter 4 in The Economics of Artificial Intelligence, 2025, pp 64-101 from Edward Elgar Publishing

Abstract: AI is the fourth technological revolution, following the agricultural revolution, industrial revolution and digital revolution. Like previous technological revolutions, AI is a transformative force that is reshaping the economy by exerting profound effects on economic growth, productivity, employment and income distribution. It is also plausible to suggest that technology (including AI) is consequential for inflation, even though it is not clear whether the effect is inflationary, disinflationary or deflationary. While AI holds immense potential to drive innovation, efficiency and competitiveness, its adoption must be accompanied by thoughtful policies that address the challenges posed by the new technology. Balancing the opportunities and risks of associated with the adoption of AI is crucial for harnessing its full potential for the benefit of society as a whole.

Keywords: Technological revolutions; General-purpose technologies; AI revolution; Spillover effects of technological progress; Economic growth; Productivity; Income distribution; Inflation; Employment (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035345854
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